Wants vs. Needs: What's the difference?
Sometimes the hardest decisions can be made by getting back to the basics. I've already said my piece earlier about how personal finance really ISN'T that hard when it comes down to it, so we'll just consider this a small little appendix to the back of that elegant masterpiece ;)Wants vs. Needs: What's the difference?
I'm going to cheat now and copy & paste something I found that really summed it up perfectly (I tried to write out my own version but it just came out all sorts of convoluted). So let's hear it for the guys over at SmartAboutMoney.org for saving me this morning:Wants are nice to have but are not essentials: eating out, going to movies, text messaging, or getting the newest cell phone and ring tones.Excellente! Couldn't have said it better myself ;) These guys also have this kick ass Wants vs. Needs Worksheet that's perfect for printing out and plopping on your wall or refrigerator if you need a constant reminder of where you'd like your money to go. There's nothing wrong with spending it on Wants, as long as you have enough to cover all the Needs. AND that it fits within your budget and you're not just slapping it on a credit card so you get the best of both worlds! (Wants & Needs, that is. Not your plasma and your new debt)
Needs are the essentials, the basics of life that you must have to survive: food, housing, clothing. Some expenses that relate to your job (that is, your ability to pay for the basics) also are needs, such as transportation to and from work, and health care coverage to keep you well enough to go to work.
Your wants will be different than my wants, and my needs will be different than Britney Spears' needs. So like everything else with finance, just pay attention to your own needs and leave Britney's to me. I mean her. Just for the hell of it, I decided to list out all my current Wants & Needs right now to show you a quick example (I used that same worksheet I mentioned above):
Luckily, most things on my Want List either costs thousands & thousands of dollars, or they require me to put in some serious effort - thus allowing me to concentrate on the Needs portion instead ;) I still might pick up the lottery tickets or the desk in the near future (esp if Target sucks me in again like it always does!), but at least I'll be making the conscious decision to do so. I know what I WANT, and I know what we NEED.
And right now, I NEED to post this before the boss walks in. So pass this worksheet along if you know of anyone who could use it. It may look a bit childish due to its simplicity, but it helps remind you what you're working/saving/living for. After all, a person without wants & needs is a person who's just plain lost. Stew on that for a minute or two...
Labels: tools and resources
posted by J. Money at
8:07 AM
10 Comments:
Ya know, I could start getting on you about that Porsche... ;) But more specifics are needed. Since I've seen you mention it before, pray tell, J. Money, what kind of Porsche is sexy enough for you? :P (I'm always intrigued when a PF blogger has an interest in something so "expensive and frivolous" like a nice car. So few do!)
I have somewhat different take on want vs need. Here it is at http://www.mewithoutdebt.com/2009/07/wal-mart-cushions-and-lesson-in-need-vs.html
@Foxie | CarsxGirl - I may be frugal at times, but a hot car will always get me excited! It'll probably be a while till I ever get one, but still ;) To be honest, I don't know too much about the performance or model of Porsche I actually want - I just know that they look awesome and they're fast. If I had to guess I'd pick a 911 Turbo. In black or red. I also really want one of those new Mercedes C300's - classy, stylish, but more practical (not in price, but in everyday use). I should just hit up a car dealership one day and start test driving a whole bunch for the hell of it. Free entertainment, right?
@mewithoutdebt - Word. I'll check it out.
Never would think to throw an Oil Change into a NECCESSITY but i stand corrected. If my puppy isnt running right, im not getting to work, and the trickle down effect of that is not a good one.
Sometimes we can solve many of our money issues by asking your question to ourselves before we make a decision... "NEED or WANT?". Imagine the things we won't spend money on if we added this process into our brains. I mean, I eat a ton during the day, I shouldn't but i do. But in reality, do I really need to eat that 3rd bag of m&m's really to get through the day? Ask yourself.
What if your needs are your wants? I just blew your mind didn't I ;) Good post
Nothing wrong with free entertainment. ;) And it's always research for later! C-class Mercedes aren't that much of a pipe dream, really. The 911 Turbo... Maybe, depending. It happens to be my preferred model too. Or, if MB really gets ya going, tell me how lovely a C63 AMG is. :P
Would it count if I want a nice car, and just plain need a car?? >:3 (I know, I know, it doesn't... That's why I have a 19 yo Nissan, a 12 yo Mazda and an 8 yo Honda, but they're all sports cars in their own right.)
Awesome post!!! I try to get this across to many of my readers, family, and friends but sometimes the wants overcomes their needs. They shouldn't but sometimes I only hear excuses etc. Great motivational post!!!
Dave
LifeExcursion
Luckily (or unfortunately, depending how you look at it) I don't have very much income right now so I really only cover the necessities with a few "wants." I also feel like I'm pretty good at prioritizing which "wants" come closest to "needs" so I spend it wisely.
The real question is when I get a higher paying job, will I resist the urge to splurge???
My favorite thing about your blog is that it's so personal. I truly enjoy seeing how someone manages their money in such detail. With respect to your wants and needs, I'm surprised funding retirement wasn't on there. Then again you left out a great deal on the needs side. I get depressed when I look at my needs list. I get even more depressed when I see my wants list! LOL
-StackingCash
"The real question is when I get a higher paying job, will I resist the urge to splurge???" EXACTLY! Very very tough thing to grasp, but if you can learn to live pretty much the same throughout all the career moves and increases in salaries, you will be one happy (and comfortable) guy! Living that way is actually one of my favorite pieces of advice.
And Thanks StackingCash :) That means a lot. You're right, I left a LOT off from both sides there, I just wanted to give a little sneak-peak if you will. I don't even know where I'd put retirement on that list to be honest...I'd like to say it would go in the NEEDS department, but I also feel like it's a WANT since you have to get the needs out of the way before you can do that. But there are def. times it DOES become a total need to me, so who knows.
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